Even Outsourcers Need to Outsource

Digital River, an E-commerce outsourcing company, says it will hire an online outsourcing contractor of its own--content distributor Digital Island.

Digital River will use Digital Island's network of 1,250 globally dispersed servers to provide quicker, more reliable downloads of online content to its 6,000 clients. In return, Digital Island will push Digital River's Web-site consulting, hosting, and management services.

"Our clients primarily deliver software, which has a high need for premium content delivery," says Perry Steiner, president of Digital River. His company also will gain access to Digital Island's TraceWare product, which helps reduce fraud by cross-checking the physical location of a buyer's logon with the buyer's billing address. Since most people shop online from somewhere near their homes, a distant logon location could indicate a stolen account number.

Digital River is practicing what it preaches with regard to the cost and business benefits it says outsourcing provides, says Ted Schadler, group director of business-to-business strategy at Forrester Research.

Says Digital Island president Leo Spiegel, "Digital River validates that application service providers will take advantage of the infrastructure that we build to serve their customers."